Income Taxes (Tables)

3 Months Ended

Mar. 31, 2017

Components of Income Tax Expense (Benefit)

The components of the Company’s income tax expense (benefit) are as follows for the periods indicated below (dollars in thousands):

	Three Months Ended March 31,
	2017		2016
Current federal income tax expense	$	7	$	-
Current state income tax expense		1		-
Deferred federal income tax expense (benefit)		1,201		(499	)
Deferred state income tax expense (benefit)		130		(91	)
Total Income Tax Expense	$	1,339	$	(590	)

Reconciliation of Statutory Federal Rate to Effective Rate

The following is a reconciliation of the statutory federal rate to the effective rate, for the periods indicated below (dollars in thousands):

	Three Months Ended March 31,
	2017					2016
Computed income tax (benefit) expense at federal rate	$	8,374		35.0	%	$	(2,713	)	35.0	%
State taxes, net of federal benefit, if applicable		136		0.6	%		(59	)	0.8	%
Permanent differences in taxable income from GAAP pre-tax income		-		-			-		(0.1	)
REIT income not subject to tax		(7,171	)	(30.0	)%		2,182		(28.1	)%
(Benefit from) Provision for Income Taxes/Effective Tax Rate^(A)	$	1,339		5.6	%	$	(590	)	7.6

(A)	The provision for income taxes is recorded at the TRS level.

Summary of Current and Deferred Tax Liabilities and Assets

The Company’s consolidated balance sheets, at March 31, 2017 and December 31, 2016, contain the following current and deferred tax liabilities and assets, which are recorded at the TRS level (dollars in thousands):

	Three Months Ended March 31,
	2017				2016
Income taxes payable
Federal income taxes payable		$	7			$	-
State and local income taxes payable			1				-
Income taxes payable		$	8			$	-

	March 31, 2017				December 31, 2016
Deferred tax (assets) liabilities
Deferred tax - organizational expenses		$	(50	)		$	(53	)
Deferred tax - mortgage servicing rights			1,011				(340	)
Total net deferred tax (assets) liabilities		$	961			$	(393	)